Skip to main content
December 15, 2018

JANE KIRINGAI: Sharing of revenue and poverty

Treasury. Photo/Monicah Mwangi
Treasury. Photo/Monicah Mwangi

Since the onset of devolution in 2013-14, more than Sh1.5 trillion has been allocated among county governments based on the following parameters: Population, poverty, land area, development index, fiscal index and basic equal share.

Of the parameters used in the revenue-sharing formula, poverty measure, land area and development index have been used to redistribute resources to address economic disparities across the various counties. Poverty, which defines the well-being of households, is used as the key measure of inequality. It has three measures: Poverty headcount, poverty gap and severity of poverty.

The revenue-sharing formula uses the poverty gap. Since the onset of devolution, counties have received Sh302 billion out of Sh1.5 trillion on account of their level of poverty.

Out of the Sh302 billion for poverty, Turkana, Mandera, Kilifi – counties with the highest poverty levels – have so far been allocated the highest amounts. These allocations were meant to help counties put in place pro-poor targetted programmes on water, health and food security, which are key county functions.

It is important to note that after six years of devolution, the poverty assessment done by the Kenya National Bureau of Statistics using the Kenya Integrated Household Budget Survey 2015-16 has revealed that on average, poverty in Kenya has declined by 10 per cent.

Another deliberate measure to address inequalities is the establishment of the Equalisation Fund. For financial years 2014-15 to 2016-17 a total of Sh12.4 billion was allocated to 14 counties identified as marginalised. Clearly, the poverty index in the equitable share allocates significant resources compared to the Equalisation Fund. Basically, the fund is complimentary and meant to address inequality. Therefore, the national and county governments should work jointly to identify pro-poor programmes to hasten development in these areas.

Poll of the day